ASIC alleged that nearly 7,000 death benefit claims were subject to significant processing delays
The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against AustralianSuper Pty Ltd, the trustee of the country’s largest superannuation fund, over delays in processing nearly 7,000 death benefit claims.
The proceedings, lodged in the Federal Court, alleged that AustralianSuper failed to handle the claims efficiently, honestly, and fairly.
ASIC claimed that between 1 July 2019 and 18 October 2024, AustralianSuper took between four months and four years to assess at least 6,897 death benefit claims after receiving the necessary claim forms. In at least 752 cases, ASIC alleged that the fund failed to pay beneficiaries as soon as practicable after a member’s death. ASIC further asserted that some payments were delayed by over a year, with one case taking 1,140 days to complete, despite AustralianSuper having all the required information.
ASIC also claimed that AustralianSuper took between 15 and 213 days to provide claim forms in 254 cases, further contributing to processing delays.
In a press release, ASIC Deputy Chair Sarah Court emphasised the importance of timely death benefit payments, stating that delays can cause additional distress for grieving families. “At its heart, this matter is about protecting vulnerable Australians and their families. It is vital that death benefit claims are processed in a timely manner. Delays are likely to cause further pain and anxiety to people who are already suffering from grief, making what is already a difficult time even harder,” Court said.
The lawsuit aligns with ASIC’s ongoing enforcement focus on member service failures in the superannuation sector. In November 2024, ASIC launched similar civil penalty proceedings against United Super Pty Ltd, the trustee of Cbus, alleging delays in processing more than 10,000 death benefits and total and permanent disability claims.
Court underscored that superannuation trustees must ensure adequate resources and oversight to fulfill their responsibilities. “It is the trustee’s responsibility to ensure sufficient resources are available to service members and claimants, and that adequate oversight of systems is maintained to deliver all services as promised to members. Accountability cannot be outsourced,” she said.
ASIC alleged that AustralianSuper contravened financial services laws, including its obligation under the Corporations Act to provide financial services efficiently, honestly, and fairly. The regulator also claimed AustralianSuper breached superannuation industry laws by failing to pay benefits as soon as practicable after a member’s death.
ASIC is seeking penalties, declarations, an adverse publicity order, and compliance measures to be implemented by AustralianSuper. The lawsuit follows a previous Federal Court ruling on 21 February 21, ordering AustralianSuper to pay a $27m penalty for failures related to merging multiple member accounts.
AustralianSuper, which manages over $355bn in retirement savings for more than 3.49 million members, accounted for nearly a quarter of all complaints to the Australian Financial Complaints Authority (AFCA) regarding death benefits in 2022/23 and 2023/24. According to AFCA data, complaints about service-related issues in superannuation have doubled from 2021 to 2023.
